Wynn Resorts Announces Pricing of Private Offering of $800 Million Aggregate Principal Amount of Wynn Resorts Finance 6.250% Senior Notes due 2033

Rhea-AI Summary

Wynn Resorts (NASDAQ: WYNN) has announced the pricing of $800 million in 6.250% Senior Notes due 2033, offered by its subsidiaries Wynn Resorts Finance and Wynn Resorts Capital. The proceeds will be used to:

• Redeem Wynn Las Vegas' 5.500% Senior Notes due 2025
• Pay related fees and expenses
• Cover a $130 million forfeiture under a non-prosecution agreement
• Fund general corporate purposes

The offering is made to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S. The Notes are not registered under the Securities Act and cannot be offered or sold in the U.S. without an exemption.

Positive

• Successful pricing of $800 million in Senior Notes
• Refinancing of existing debt with new 2033 maturity
• Potential for improved financial flexibility with general corporate purposes funding

Negative

• $130 million forfeiture under non-prosecution agreement
• Increased debt load with new $800 million notes issuance
• Potential dilution of shareholder value due to increased debt

Insights

Financial Analyst

Wynn Resorts' $800 million senior notes offering at 6.250% interest rate is a strategic financial move. This refinancing effort, replacing the 5.500% 2025 notes, suggests a proactive approach to debt management in a higher interest rate environment. The $130 million allocation for the non-prosecution agreement indicates the company's commitment to resolving past issues. While the higher interest rate may increase debt service costs, it provides Wynn with extended maturity until 2033, offering financial flexibility for long-term planning. This move demonstrates the company's ability to access capital markets, but investors should monitor the impact on future cash flows and profitability.

Legal Expert

The mention of a $130 million forfeiture under a non-prosecution agreement is significant. This likely relates to a settlement of legal issues, potentially stemming from regulatory or compliance matters. While resolving such issues is positive for long-term stability, it represents a substantial financial outlay. The private offering structure, to qualified institutional buyers and certain non-U.S. persons, complies with Securities Act exemptions, demonstrating regulatory savvy. However, this approach also limits the potential investor base. The legal landscape for Wynn Resorts appears to be evolving and investors should closely monitor any further developments or disclosures related to the non-prosecution agreement.

Market Research Analyst

Wynn Resorts' decision to issue new notes at a higher interest rate reflects the current market conditions and investor sentiment in the hospitality and gaming sector. The successful pricing of $800 million in notes indicates continued investor confidence in Wynn's business model and future prospects. However, the higher interest rate of 6.250% compared to the previous 5.500% suggests increased perceived risk or broader market trends affecting borrowing costs. The use of proceeds for debt refinancing and legal settlements demonstrates a balanced approach to financial and operational challenges. Investors should consider how this debt issuance might impact Wynn's competitive position and financial flexibility in the evolving post-pandemic hospitality landscape.

LAS VEGAS--(BUSINESS WIRE)-- Wynn Resorts, Limited (“Wynn Resorts”) (NASDAQ: WYNN) announced today the pricing by Wynn Resorts Finance, LLC (“Wynn Resorts Finance”) and its subsidiary Wynn Resorts Capital Corp. (“Wynn Resorts Capital” and, together with Wynn Resorts Finance, the “Issuers”), each an indirect wholly-owned subsidiary of Wynn Resorts, of $800 million aggregate principal amount of 6.250% Senior Notes due 2033 (the “Notes”) in a private offering.

Wynn Resorts Finance plans to (a) contribute and/or lend a portion of the net proceeds from the offering to its subsidiary, Wynn Las Vegas, LLC (“Wynn Las Vegas”), who will use the amounts to (i) redeem in full Wynn Las Vegas and Wynn Las Vegas Capital Corp.’s 5.500% Senior Notes due 2025 (the “2025 LV Notes”) and (ii) pay fees and expenses related to the redemption and (b) use the remainder of the net proceeds for general corporate purposes, which may include covering all or a portion of the $130 million forfeiture under the non-prosecution agreement described in our Current Report on Form 8-K filed with the Securities and Exchange Commission on September 6, 2024.

The Issuers will make the offering pursuant to an exemption under the Securities Act of 1933, as amended (the “Securities Act”). The initial purchasers of the Notes will offer the Notes only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act or outside the United States to certain persons in reliance on Regulation S under the Securities Act. The Notes have not been and will not be registered under the Securities Act or under any state securities laws. Therefore, the Issuers may not offer or sell the Notes within the United States to, or for the account or benefit of, any United States person unless the offer or sale would qualify for a registration exemption from the Securities Act and applicable state securities laws.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the Notes described in this press release, nor shall there be any sale of the Notes in any state or jurisdiction in which such an offer, sale or solicitation would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Wynn Las Vegas intends to redeem all of the outstanding 2025 LV Notes on or after the closing of this offering. This press release does not constitute a notice of redemption or an offer to purchase or the solicitation of an offer to sell such notes.

Forward-Looking Statements

This release contains forward-looking statements, including those related to the offering of Notes and whether or not the Issuers will consummate the offering. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those we express in these forward-looking statements, including, but not limited to, reductions in discretionary consumer spending, adverse macroeconomic conditions and their impact on levels of disposable consumer income and wealth, changes in interest rates, inflation, a decline in general economic activity or recession in the U.S. and/or global economies, extensive regulation of our business, pending or future legal proceedings, ability to maintain gaming licenses and concessions, dependence on key employees, general global political conditions, adverse tourism trends, travel disruptions caused by events outside of our control, dependence on a limited number of resorts, competition in the casino/hotel and resort industries, uncertainties over the development and success of new gaming and resort properties, construction and regulatory risks associated with current and future projects (including Wynn Al Marjan Island), cybersecurity risk and our leverage and ability to meet our debt service obligations. Additional information concerning potential factors that could affect Wynn Resorts’ financial results is included in Wynn Resorts’ Annual Report on Form 10-K for the year ended December 31, 2023, as supplemented by Wynn Resorts’ other periodic reports filed with the Securities and Exchange Commission from time to time. Neither Wynn Resorts nor the Issuers are under any obligation to (and expressly disclaim any such obligation to) update or revise their forward-looking statements as a result of new information, future events or otherwise, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240910408244/en/

Price Karr

702-770-7555

investorrelations@wynnresorts.com

Source: Wynn Resorts, Limited

FAQ

What is the size and interest rate of Wynn Resorts' new Senior Notes offering?

Wynn Resorts (WYNN) has priced $800 million aggregate principal amount of 6.250% Senior Notes due 2033.

How will Wynn Resorts use the proceeds from the Senior Notes offering?

The proceeds will be used to redeem Wynn Las Vegas' 5.500% Senior Notes due 2025, pay related fees, cover a $130 million forfeiture, and fund general corporate purposes.

What is the $130 million forfeiture mentioned in Wynn Resorts' announcement?

The $130 million forfeiture is related to a non-prosecution agreement, as described in Wynn Resorts' (WYNN) Current Report on Form 8-K filed on September 6, 2024.

Are Wynn Resorts' new Senior Notes registered under the Securities Act?

No, the new Senior Notes offered by Wynn Resorts (WYNN) are not registered under the Securities Act and are being offered through exemptions to qualified institutional buyers and non-U.S. persons.